On Our Radar

Poor Retirement Planning Leads to Poverty for Some Seniors

Official Census data from 2010 shows that over 3.5 million seniors were living below the poverty level. For many, this means using Social Security to pay for daily living expenses as well as costly medical care. Whether they didn’t plan for retirement or lost their money when the markets took a downturn, the hard truth is that many are struggling to make a passable living on the meager funds available with Social Security.

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Many people believe that Social Security is their only guaranteed income during retirement, especially after witnessing current seniors losing their money to the fickleness of the stock market in the past decade. However, there are options to help rest your fears about your upcoming retirement.

I’ve noticed that quite a few people believe managing their own retirement is easy, that they can follow Wall Street, and they’ll be all right. The truth is that figuring out your retirement can be much harder than you think. There are tons of options, and people are genuinely afraid of making a retirement-killing mistake. Many prospective retirees are still operating on financial advice that was useful 10 years ago, but means nothing in today’s market.

Nowadays, people need to plan to live longer than their parents did, pay more for medical expenses, and potentially seek nursing help for their later years.

I always advise that pre-retirees seek the counsel of an experienced retirement planner to hear safe financial options that don’t leave them high and dry when they need the money the most.

When new clients enter my office for the first meeting, I ask what factors are important to them when they retire. Everyone’s answers are different. Some want to have an inheritance to leave their families. Others want enough to spent their retirement traveling. However, almost all want to ensure they don’t outlive their money or risk losing everything when markets inevitably fluctuate. From there, I help customize each family’s retirement plan to help them achieve their financial goals.

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Studies have shown that Americans are only saving a little more than a quarter of what they need to retire. This means that up to 80% of retirees will be dependent on Social Security as their main source of income once they stop working leaving them underfunded for up to 20 years. You wouldn’t set yourself up for those sorts of odds before retirement. Why leave the years you’re supposed to enjoy up to chance?

The key to a secure retirement is looking for low-risk, safe investments that help accumulate adequate interest while deferring taxes until you’re ready to receive disbursement. Find an expert in your area to help you prepare for retirement, but also to help you understand how to get the most out of your retirement distribution payments.

Whatever you do, don’t be one of the many retirees left without a plan when the time to retire rolls around. Many people approach me knowing nothing about retirement except that they need it. It’s better to ask questions now that be sorry you didn’t later.